The government’s June statistics contained an unpleasant surprise for the Class of 2011: a ten percent rise in the unemployment rate compared to June, 2010. Twelve percent of college graduates under the age of 25 had no work at all in June, 2011—not even a part-time or low-level job.
It wasn’t supposed to be like this. After two years of unemployment rates above ten percent, there were signs of improved prospects for college seniors. The National Association of Colleges and Employers (NACE) reported in March that 53% of employers planned to hire more college seniors from the Class of 2011 than the Class of 2010. And, colleges across the country attested to increased participation from employers in fall career fairs.
But, the anticipated uptick in employment appears to have fizzled. A NACE student survey completed in May, 2011, showed that while close to half of those who applied for positions received a job offer, only 24% of respondents had actually accepted a job by graduation. No improvement over last year.
It is likely that those who did not accept their job offers are looking for more relevant and lucrative opportunities. But, many of those students holding out for a better offer are likely to be disappointed. They will have strong competition from those who graduated two years ago and still have not found a career path.
An unemployment rate of 12%–for any group of college graduates–is unprecedented in recent memory. And, the rate is likely to stay high unless there is a massive increase in job creation. Here’s why:
More young people are graduating with bachelor’s degrees Between June, 2008 and June, 2011, the number of college grads aged 20-24 grew by 66,000.
More young graduates want to work Typically, around 80% of bachelor’s degree grads aged 20-24 participate in the labor force, with the remainder attending graduate school, or taking time to pursue other non-work activities. Between 2008 and 2011, however, there was a 5% increase in young graduates who were either working or looking for work. That means over 100,000 were competing for essentially the same number of jobs as in 2008.
Fewer young graduates are going immediately to graduate school Given increased participation in the work force, it appears that younger grads are putting off graduate school, or choosing not to go at all. This is likely in response to high debt loads and an uncertain employment market.
Without intervention, high unemployment of new college graduates is likely to be the norm for the foreseeable future. If we want young people to capitalize on their education, pay back their considerable loans, and make meaningful contributions to society, it is incumbent on educational institutions, employers and the government to work together to find new solutions. Without new approaches, Barack Obama’s efforts to increase the number of college graduates will backfire.
Note: All statistics are from BLS, Table 10 (unpublished). Future blog posts will discuss how the employment crisis for young college graduates can be alleviated, and what role students and their colleges will need to play to ensure their employability.